When moving into aged care a resident is required to pay what’s known as a RAD (Refundable Accommodation Deposit). On the surface this doesn’t seem to be an issue until you realise the deposits can be upwards of $500,000.
It usually means the resident has to sell their current property to fund the deposit which can be extremely stressful especially if the move into aged care is urgent. It can also mean the resident sells their property below market value due to the urgent need for funds.
There are a host of other issues as well. In some instances the property is owned by an elderly couple but they don’t both require the move into aged care.
Such is the demand approximately $3 billion dollars a year will be required to fund individuals needing to move into aged care facilities and this figure is predicted to double by 2025.
An alternative to selling property is now available. One of Australia’s biggest non-bank lenders has introduced an Aged Care Loan. The loan is designed to pay the RAD and can also be used for repairs on the security property and repayment of any outstanding debts.
Applicants must be over 80 years of age but younger borrowers will also be considered on application. Up to 50% of the value of the property can be borrowed with a maximum loan amount of $750,000 allowed.
The maximum term of the loan is 7 years and the facility can be set up under an enduring power of attorney. The loan is then paid back when the applicant either leaves the aged care facility, when the loan term expires or the property is sold.
For more information about our aged care solution, please contact Andy Edmonds on 0448 811 567 or email andy@matrixfinancegroup.com.au